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Master Scheduling - Part 1 of 5

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The Master Schedule maintains an important position as a gateway in the flow of information between Master Planning activities (Business, Demand and Production Planning) and the Detail Planning and Execution of daily business operations. The Master Schedule's primary pur­pose is to translate the strategic initiatives of Top Manage­ment into workable day-to-day actions that result in mak­ing and shipping products to customers, providing service and earning their satisfaction. The Operations Manage­ment chart (Figure 1) is a description of the familiar "closed loop" Manufacturing Resource Planning diagram. The chart describes the relationships between three important pro­cesses—Master Planning, Detail Planning and Planning Execution. Supporting these three processes is the Infor­mation System represented by the Bills of Material, Inven­tory, Process/Routings and other important data bases. Holding all these processes together are the linkages and feedback loops that show how information flows between each functional area. The gauge for finding out the effec­tiveness of the total process is Performance Measurement.

Each of the three primary categories have distinguishing characteristics that set them apart. This is especially true between the Master Planning and Detail Planning pro­cesses. Consider the Operations Management Processes (Figure 2) that show several characteristics associated with the two processes. The "translator" that takes the broad business view of Master Planning and puts it to work in an operational sense is the Master Schedule. The levels of detail, type of decisions, time frames of analysis and other characteristics are strikingly different. As an example, from a Demand Planning viewpoint, the strategic implication of improving the company's market share can contrast sharply with the operational pursuit of making products and shipping customer orders daily. Gaining market share has significant strategic business implications. Shipping customer orders complete and on time may be the tactical means to achieve the larger business goal. The Master Schedule should be the key that deploys Top Management's strategic initiative into the tactical reality of getting the job done.

The process of Master Scheduling defines what the com­pany plans to produce in specific configurations, models, and items. It specifies the items and quantities that will be manufactured and their schedule dates. These Master Production Schedules drive the material plans that provide answers to the questions of what, how much and when components, subassemblies, and raw materials should be made available. Material Requirements Planning drives the Capacity Requirements Planning function which com­pares work center loads to the availability of equipment and personnel. The source of these actions is a Master Scheduling function that should represent the business strategy of Sales and Manufacturing.

Master Scheduling Effectiveness

It seems logical that most companies would recognize the importance of the Master Schedule in the total scheme of an effective Operations Management system. Yet, the reality may be that of all the functional areas of the Operations Management system, the Master Schedule is likely the least understood and used. Based on several studies of Master Scheduling effectiveness, the data shows that most companies have not fully understood the impor­tance of Master Scheduling. They do not realize the critical impact it has on the total effectiveness of their planning and scheduling—and ultimately their performance in ser­vicing the customer.
Since presenting the initial information at the APICS International Conference in 1991(aBreaking Through the Class "A" Barrier, pg. 633-636) the evidence and conclusion have remained consistent—Master Scheduling is the poor­est performer of the three inputs to the Material Require­ments Planning process. During the past several years Gerald A. Sanderson, Inc. has been conducting an ongoing survey of companies to gauge the effectiveness of their Manufacturing Resource Planning systems. Participants are asked to give an estimate of their percent performance, following Class "A" Manufacturing Resource Planning guidelines. The measurement keyson meeting the Master Schedule dates and quantities. They are also asked to give the accuracy of their Inventory Stock Status and Bills of Material and the average number of levels in their Product Structures. Using an Interactive Performance Measure, the results show that the Master Schedule performance falls consistently behind in third place by a wide margin!

The reason for this poor showing in Master Scheduling performance was identified by Pohlen and Ticknor in their paper (Parameter-Based Master Production Scheduling, pg. 17-21) presented at the APICS International Confer­ence in 1989. A summary of the results (Figure 3) makes an important point by exposing the casual attitude Top Management has toward Master Scheduling. Most compa­nies surveyed marginally recognize the existence of the Master Schedule. Most of those who do "use" the process seem to have limited success. The data shows that only 5% of the companies surveyed have set up the Master Schedul­ing module that came with their standard Manufacturing Resource Planning software! It seems that most companies are driving the Material Requirements Planning process with only the Bills of Material and Inventory information!

Continued

Part 1  Part 2   Part 3  Part 4  Part 5


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